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tv   Key Capitol Hill Hearings  CSPAN  December 30, 2015 4:30pm-6:31pm EST

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criticism that is not yet been activated. that is a board design is medicare spending reaches a certain form, how do they reduce those costs. that being said, the vast majority of the eighth a is an affect. if you are 65, you should qualify for medicare. your wife would be on it in two years. this is a common criticism that people who do not need maternity coverage or do not want maternity coverage, they are being forced to buy it. i assume it is expensive because it is expensive to have a baby in a hospital. that is part of the essential health benefits. awaynot see that going anytime soon because maternity care is so expensive. i think lawmakers are going to keep that is one of the requirements under the law. host: kimberly leonard, what is the difference between the medicaid and affordable care act?
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kimberly: originally, when the lawless past, it was supposed to apply to every state. governors took that to the supreme court and states could decide on their own if they want to extend medicaid. so far, 30 of them have done so. those who have not, it is strange, but those were not extended it are also concerned about what is going to cost them. the federal government is supporting expansion of medicaid for a few years, but then states will have to pick up 10% of the cost. concerned because states have already cut back education, infrastructure, public safety, in order to fund medicaid. will it be another mandated expense? that is one of the reasons why they are picking -- not picking it up? statesy: i do not see
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taking away health care for the poorest americans once they have provided it. it will come down to the legislators deciding whether it is something they want to do. >> we have an interesting case study of that right now in kentucky. red state ind a the south, he was very active on implementing the aca. he saw it not only as a policy reason, because he could save state money, but also more reasons to provide health care to his residents. i'm sure you saw the story. kentucky was a huge success on the aca. a republican i just won the governorship and he is promised to take apart the aca. he has backtracked a little bit on undoing the expansion of medicaid there. he has to submit his budget setting. it will be interesting to see
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what he puts in their. he has said that 2017 is the year to do it to give people some time. kentucky is interesting. when i went there to write about this, you have people talking about the affordable care act obamacare and connect, which is what the kentucky aca exchanges called. totallyaw that as two different things. they hated obamacare and loved connect. as the government moves ahead, he will have to be critical of the people who got coverage and what happens to them. whether they view it as a political liability. kentucky is an interesting state republicansause will see what happened and take lessons from it. host: michael is in columbus, georgia. caller: good morning, thank you for having my call. host: we are listening. caller: i do have a few points to make. as far as affordable care, my
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fiance had affordable care in a red state in louisiana. she was not working. of was paying a high premium $85, even though she was unemployed. state,ved to another red borderline blue state in georgia, it was a lesser cost. it seems like there is some discrepancy there. the second point, how does compliance track employers who have employees over 100. she became employed in georgia, but a company that has over 100 employees, they do not offer any type of health care benefits. she had to eventually apply for affordable care act. the next, i will make, with blue cross and blue shield working for the state in two different states, it is interesting how the partisan plan changes, even though we can have a high premium to authorize mitigation. thank you. state-by-state, it is
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interesting because they have different marketplaces. the offerings you have been state are determined by which insurers want to be there. variesar, it state-by-state and year-to-year. some states, south dakota, iowa, they have very few offerings. you have situations where people have one or two options. then, you have other states who have other -- a ton of options. you can have a similar blue cross plan in louisiana and go to georgia with a similar plan but with a different price. that is up to the individual insurers to price their insurance plan market to market. that is why we see some people and some said -- states they like it better because the pricing is different. in terms of compliance, employers have to tell the irs and the federal government how many employees have offering of
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insurance and have taken insurance. are set by the number of employees who go to the exchange to try to get subsidies. you could have a situation where employees do not get covered at work, but if they do not go to the exchange, the fine is not triggered. it they do go to the exchange, the government sees that this person works at x company and they should get an offering of insurance, then the fine gets triggered in the employer has to pay to each of person i was affected. 2015%.n as of this year, it is at 12%. tracy is uninsured and living in cambridge, maryland. caller: yes sir. i am 42 years old, married with and theage kids, 114 other 17, a girl and a board -- boy.
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i've been on insurance for the past year. i have no look filled -- i was receiving 15 to 20 calls a day, some of them arrogant trying to push their insurance. when it comes down to it, to cover my family and have a semi-affordable anything, as far as what people are not asking about your major medical or hospital organization. i hear congress talking about mental health, but none of these insurance companies offer mental health for children or anything like that. , $10,000 of debt bubble thousand dollars deductible. that, maryland being a democratic state, they do not offer subsidies for me to of my family to get affordable health care coverage. host: tracy, are you employed? caller: yes, but my employer
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does not offer insurance because me and my wife are his only employees. i work as a property manager. host: you have -- as maryland have -- are they using the federal exchange, or do they have a state exchange? i guess you would call it a state exchange because it is a maryland exchange. there is nothing deal with obamacare or aca. it directs you write to your and youare companies have to buy the regular plans. they would tell me that my fine is almost $1000 this year. they know that, but they cannot give me any way to get insurance for my family under $500 a month and not have a $1200 a month but the best deductible. month. was sick last
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in theory, it is not worth me buying insurance when i pay so i still have to come out of pocket when i am sick in the prescription drug costs. it does not offer the stuff we need for children, especially coming up in a society where we are coming up and with so many mental problems and things going on. view, it should be straight across-the-board. every state should be the same. if i go from one county to the next county, why should their medical costs be more than the previous county i was in? we are not buying cars, we are trying to be healthy. there is a lot more that people need to take a look at. the affordable care act is affordable when you pay $40 a month, but when you have kids, need clothes, things and to do, it is not affordable anymore when you actually get sick. host: that is tracy from maryland. talk abouthen you
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whether people should have insurance or pay the penalty, it depends. if you do not have many health issues that you, you might end up spending less than if you had bought health insurance. people end up in these disastrous consequences that they do not anticipate with their health. in terms of a state offering the same plans, the aca and a lot of ways aims to give state some freedom in establishing their own exchanges and things like that. most states have opted to go to, most states -- 30 states use it. how can somebody like tracy find out if he and his family are eligible for a subsidy?
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jennifer: we will give you that information. subsidies are available in maryland, anywhere, regardless of where you live if you hit the certain income levels. i am not sure if tracy does, but they are available. that is something worth checking out. host: thomas is from florida, you have insurance through the exchange, correct? caller: yes. host: what was your experience like thomas? but better than nothing. i am looking at a graph from a peterson foundation. it shows that per capita in the united states, $8,713 is what it averages out to per-person. canada, looking at $4351 per person.
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switzerland $3600 -- host: we have the point, where are you going with this? don't you have some people from these countries that have so the american people how bad we are getting screwed. another point i want to make, the affordable care act is a republican plan. it was a republican idea to the heritage foundation. it is meant to protect insurance companies. you are going to get just a little bit better deal, but you're are never going to get the right deal -- they always want to talk about free market and capitalism and all of this. you are never going to have that here because you have a monopoly. host: we have the point thomas.
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the u.s. spends twice as much per capita on health care as the average developed country does. this idea of having some representatives from other countries is good. we start with you kimberly leonard, then jennifer haberkorn , why do we spend more per capita on this country than other nations? >> we have a much more complex it -- system. we have medicaid, medicare, we do not have a single-payer system. we do not negotiate the costs of drugs. what is paid for various significantly by hospitals, doctors, health care facilities. you end up spending a lot more with nothing in place. that is why you are seeing the cost of health care rise every year. --t year, he was even higher it was even higher, close to $9,500 per person in total
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spending. .ennifer: i agree if you want to spend $100,000 for an elderly relative's they in the hospital, they let you do that. decidedcountry have that we were not stop you from doing that. as we saw during the debate on the aca, nobody wants that. thatnk if you apply through the health care system in a less dramatic way, some insurers will allow you to going -- go to as many doctors as you want. doctors will order an mri for your need that if you go for another doctor they will also order an mri. there is a lot of things going on during the health care system that does not take place in other systems. source of there is a
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frustration for the health care providers and consumers. host: mary from atlanta, good morning. caller: i would just like to describe -- i am a union member. living make this very clear that i am not an employee. i work for somebody makes it clear that i'm not there employee. i am a member of the union economy. because of the contract my union made for the people we work for, abortion i pay goes towards health and benefits. -- i have onegh choice for health care through the union. how it goes is, i never know how .uch i'm going to work i never know how much i'm going to make. me,way they bill mean --
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contributions are made in the get posted at some point. every quarter, they sent me a bill for the health insurance and they say you all $1200 to keep her health insurance you have to pay in 10 days before goes away. you cannot do it again until open a roman. mary, do you get it through the affordable care act? or is it sponsored by your employer? caller: i am not anybody's employee, however because i am a union member and i get my work or the union, i am subject to their union health care. host: what kind of work you do -- do you do? caller: i work in the theater. they do not play -- amy as an employee.
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so, i get a bill and it will say you oh $600. pay within 10 days or you lose insurance. usually, i do not just have that laying around. said i will just try to go on the exchange. for 10 years as contributions that are made might be a couple thousand a year. i cannot get that back from the union. i cannot say that i'll spend this money on other health care. if i do not goes union health care i lose that for the year. i decided last year that i would just do without that money and go on the exchange which i did. up so that isent
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too expensive for me to do. i think we have got the idea. host: this is from usa today. talk about people who are falling into the health care netherworld. their employers classify them as part-time or independent contractor therefore avoiding any obligation to provide health care. there stayed to has not expanded medicaid to include lower turners. and government mandates have a standard for affordable coverage that is not affordable at all. the idea was that everybody was supposed get health insurance coverage no matter your income or where you live. that was the goal and we are saying that that has not really taken place. there are a lot of cracks in the system one huge one is medicaid expansion. in 2012 the supreme court said they do not have to expand medicaid. some states have not. we see people falling in the
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gaps. fall in gapspeople going from medicaid saying that maybe they have a good job and they lose the job. churn or you're going to different health care systems. people inevitably fall through the cracks in and end up not having coverage. it is an issue. will be think it repaired right away because of the political dynamics. fors a real liability people who find themselves without coverage. whether it is affordable or they simply do not have access. that now that the aca is fully in effect and has been around, we see cracks in coverage. have not we talked about this morning that we need to talk about about health care in 2015? can talk with the year ahead. we can talk about the election
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and what proposals are being made. what is interesting is that both parties, they have different doingge for what they are . some of the goals and upping the same. both parties seem to agree that drugs are too expensive. how they will tackle that is a little bit different. hillary clinton said she would propose a plan or medicare selected negotiate drug prices and she also said she would cap out-of-pocket spending for individual beneficiaries. jeb bush said his plan would ands on prescription drugs focus on moving regulatory processes. they make it difficult and expensive for drugs to get to market. it would be the cost of purchasing the drugs would be less. we'll see what will happen. there does seem to be some concern that we have certain
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where people can be under parents plan until age 26. people cannot be denied coverage because of a pre-existing condition. of thewill be happy coverage they're getting. host: what would that due to our overall system? guest: repeal is a more complicated term because even one the catalog was pushed back, republicans call that repealing obamacare. it is more looking at repealing portions of obamacare. away, portions were to go if we were to roll back medicaid , that means that people who make the least of anyone else wall not have access to
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affordable health care. the question becomes what do you do to cover this people? it will have to pay for their health care expenses. people would do it as they come into coverage. they will get there early, they will get there as they go. guest: i think things will be healthier. it is a presence last year in office. this bears his name in the unofficial lignin for obamacare. i think that the white house is going to try to take some steps to shore up the legacy. that one of the biggest liabilities right now is that exchanges the premiums and insurers. saidme of the callers have
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, they are frustrated with the cost of these plants. i think the white house will be looking at what they can do to and bring downrs the price. it is called a formal care act, but people do not think it is affordable. for the next couple years when the fine for the individual -- $695, people are really looking at that money and compared it to their plan. if they think the mandate is cheaper, they will go with that. that is going to ruin the idea behind this legacy. if we look at the presidents a good picture of domestic policy, this is his biggest achievement. the white house wants to make sure that the law is set up as best as it can be. regardless of who the next president is. if it is a democrat, they have less to worry about. republican, they will
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do the opposite. that is something to watch for in the next year. the deal with prescription drugs will be very interesting. at the end of the server saw bad pr for a lot of drug majors -- makers. the cure for hepatitis c was great and wonderful, but states are concerned about the cost of that drug and how much it will impact state medicaid budgets. that is something drugmakers have to address. kiraly --w martin's he is in trouble with the fcc. he got negative publicity for the drug industry when he raised the price of an important drug for hiv patients. so, drugmakers, in general are facing a lot of pressure to do something about price. you can argue that it is a little unfair that they are
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curing hepatitis c but facing criticism for it. that is still something that has to be addressed. like i said, we saw hillary clinton talk about that word we're seem republicans talk about it. think6, i do not legislation will pass in congress. if the pressure on the drugmaker continues, it could be if the nextto see president makes it an issue. host: we are fed several callers saying this is a republican idea. guest: what they actually mean by that is that the marketplace was a republican idea. one thing that was not a republican idea was requiring insurance to cover a range of coverage -- was to provide a range of coverage. republicans do not vote in favor of this at all. so, the portion of that one health reform is being discussed , the portion that was
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attributed to republicans was the marketplace plans where consumers can go and make choices about their health care. insurance companies have under whats democrats set up to provide a range of services. we talk about maternity care. it is one of the essential services and that all health care plans are supposed to include. because they're a clue more services, prices will go up. host: next call. from and in lake charles, louisiana. uninsured line. you're on the washington journal. caller: hello. good morning. this is directed to kimberly because, i see she is supporting the government more than the other lady. but, this is the issue i am having. my husband has insurance on the
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job. giveyers are allowed to any kind of insurance that they want to offer. any kind. my husband has insurance in the job where the deductible is $5,000. before they show up, your insurance company has to come out of the pocket for the deductible for 5000. listen to this, who is going to see a doctor yet go -- dr.? they will come out of the pocket before his time to renew your insurance. that'll be another 5000. you'll see the doctor over and over. you or yourch do husband paying premiums you go -- premiums? $49 deducted out of his check every week. there wasn't any need
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to come in on this kind of insurance. i have health issues. i had to resort to the charity hospital again. i have high blood pressure. i have arthritis. i have skin issues. my husband told me that there was not any need for me to come in on the insurance. what is the issue? if this be affordable health care plan is designed to protect the government and not the people. your point. kimberly, i think you probably take issue with that because you support the government plan. guest: there are a lot of things to talk about in regards to the affordable care act and people have different views about what works and what does not. my job as a reporter is just to look at what people are saying. a lot of people complain about high deductibles. if you have an employer plan, a lot of them are anticipating the cadillac tax. they are anticipating that they
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are going to be taxed higher to provide more expensive plans. the cadillac tax will supposed to apply only to the wealthiest americans. those receiving plans that were so expensive and high that it would just apply to the wealthiest people. however, because the cost of health care is going up because of premiums deductibles most things are going up that means that middle-class people, teachers nonprofit workers, technically it will have a cadillac plan in a few years just because these overly generous definitions and up apply to some more people. host: mary in maryland. hello. caller: thank you for taking my call. good morning. i am a little angry at utilities right now. you're not really telling the colors the things that they really need to hear. let me tell you what i went through. i'm on the aca. i just got the letter from blue cross blue shield.
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a $74 a month plan. my deductibles 1500. i'm in the cross sharing. network,within your your insurance company will pay the other half of your deductible. is 700.tible you're not really supposed to pay on the deductible. that goes to the doctor. i never wents online. i went to a navigator. ton it man for maryland, go a navigator. there's credit for you. is $555. i went to a navigator and explained. he said the insurance company will close the plan, move people to another plan without informing them. you get the bill saying your mount has tripled. go back to navigator. even if you need a gap. go back and say you cannot afford that.
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it will find a better plan. when you -- about aen you talk navigator, what is that? caller: it is -- it is a person who knows the website. i want on that in the bill i cannot with the was $200. when i went to the navigator and made an appointment she found a plan at blue cross blue shield. the silver plan is what everybody needs. my navigator move me over to the silver plan hmo my cost will be $65 a month. my co-pays five dollars and $10. you do not worry about paying your detectable. people talk about the $5,000 deductible. the should of got to a navigator. the insurance company wants you to have a high plan, they do not want to work. host: thank you. guest: the navigator has become very popular. my understanding why set down with the navigator watching the navigator help the consumer,
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they were not hard to make sure it people are getting the best value or find a plan that fits for them. so, navigators are great. she is right. the caller mentioned cost-sharing. that is different than the premium subsidies available. the premium subsidies are available for people who make 400% of the federal poverty level. it is a metric the government uses to make things more confusing. that is something you get that takes up the cost of your premium. so if your premium is $150 and the government gives you $50, your out-of-pocket premium cost is $100. the cost-sharing subsidies are for people between 100 to 250% of the federal poverty level. so, a portion of the people to get the premium subsidies. that is designed to help people the out-of-pocket cost. reduceductible would be
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because these cost-sharing subsidies are available. some people argue that they should be available to more people. they are very costly to the federal government because it is my they are handing out to help people pay for insurance. so the caller mentioned the other car have for maryland. perhaps if he qualified for cost-sharing subsidies here find that plan a lot more affordable. host: justin in nebraska. hello. caller: hello. how are you guys doing? now,my comment is, right think the problem with health care and affordable care act and everything is that right now, health care in america is a huge business. when a person goes and they create a product or something like that, they're selling the product. wrong, they are trying to solve an issue, but
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they want to help themselves. we have health care is a business. insurance companies are going to drop people. as a business. they're are trying to make money. they are not tied to help. host: health care is a business. guest: insurance companies are under the law. they cannot just drop someone. they cannot just not accept because of a particular illness. they have managed to look at loopholes in different parts of the law. arguee cases, some would that mental health has not been covered. there has been a a lot of discussion over what kind of contraception is for women are covered. the administration has had to clarify what it means every so often when it looks up law.
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yes, we meant contraception to be covered. then, it takes public comments and looks at what people are saying. going back to prescription drugs is a business, there is not a lot of transit baird see -- transparency. drug companies say it is -- it is expensive to develop a drug. most drugs that work on never make it to market. they pay all this money for drugs that fail. in addition to that, we have to recoup the costs from drugs that do make it to market. also have to have enough money for innovation in the future. how do you set a price on that? that is their argument. however, we are seeing all these high costs. rise seeing drug prices more than any other part of
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health care spending. double that in 2014. so, looking at that will be a big part of how we ran in the costs. when the aca began, we talked about co-ops. what is that and what is the status? to be an was designed alternative to a private insurance company. it was going to be a group of people together in a state or region. have them insure each other. the same weight insurance works at a private insurance company. get all of the people together at a nonprofit. be an alternative to the health insurance company. it ended up being one of the biggest failures. found that there was one significant factor in their demise. , which was arridor
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risk mitigation tool, it was designed to adjust to the market. the theory was that they would change everything, change risk rules. you get all the coverage you need. if you have a hard time adjusting to that, this risk program was supposed to help you recover. politically, republicans lashed onto it as a bailout of insurance companies. 2014, a provision was inserted into a law. marco rubio has taken a lot of credit for it. there is disagreement over whether he was the head of the provision or not. to make the program's budget neutral. to take money out of it. the co-op was the newest insurers. they said they needed the most help adjusting to the market. they did not get the money to fix their cost. they said this led to their
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demise. the problem for consumers is that they had these co-ops for insurance in 2014. now, they will go away. so, in some states the co-op was a major insurer. colorado had a huge co-op. consumers of all find new insurance coverage. they do not have the promise that the president made of keeping the insurance that you like. so, the co-ops were a quirky idea. something new to try. to increase competition. cliff, in new york. calling on the uninsured line. you are on the washington journal. caller: thank you for having me. it is important to remind everybody that the poster child for co-ops, kentucky, is in the process of going down.
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we all have to admit that none of the promises that were made bringing health care superlow, keep your doctor and insurance, none of them have been kept. when the slow was being made, there was a joke that if you do not have a seat at the table, you are on the menu. i'm sorry to my democrat friends, this was a giveaway to the insurance companies in the drug companies. of course their stocks are rising. of course they are. of course the prices are going up. now, it is subsidized by the government. why anybody would think putting the federal government between the patient and the doctors's going to bring down prices is beyond me. it is beyond the pale of the aca. it is neither affordable or about care. it is not about health care.
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it is about insurance. host: kimberly. guest: when obama was running for the presidency, and when he was touting the law for passage, he did say that people would be of the keep their doctor. that turned out not to be the case. has named that statement as the biggest lie of 2013. the problem was that in making that promise there were almost not looking at the unintended consequences. when you're asking insurance companies to cover more people and services. we have to find a way to rein in costs. one way to do that is by providing a narrow network of doctors and hospitals. these plans will not necessarily have the doctor you're used to. they will not necessarily cover all of the physicians and nurses and other health care providers that you're trying to visit in the hospital. making that kind of a promise
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was not rooted in fact, because it was already occurring pre-aca. and regulations arguably made it worse. guest: what have an interesting dynamic and that we have two truths about the aca. the democrats are trying to say that the uninsured numbers reducing. becausee being saved they're getting a cancer screenings and they're catching diseases early. all that is true. then we have the republican narrative which is the broken promises from president obama. rising premiums. all that is true. so, i think that's why the politics have been so severe and so harsh for these last six years. we have two stories that are true. both parties have some truth behind their political arguments. i think that is why the aca will be as volatile.
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oft: it is christmas eve 2009 when the senate passes the affordable care act. it is in march of 2010. how far along are we in the limitation of the affordable care act." -- act? all, therst of marketplace has rolled out. this is the third year of open enrollment. the individual mandate which required people to sign up for insurance or pay a penalty, we have had smaller parts rollout. nutrition guidelines at restaurants. we have had preventative services covered. able to stand their parents plan until 26. a lot of the law has rolled out. for the next few years we will see more. thiss impacted the end of occurring in 2018.
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so, will see what some of the impacts are there. have been some adjustments along the way that were different than what had been anticipated. by the administration itself. what is going to happen in 2016? guest: i think we have prescription drugs to watch out for. the president last year will shore up the aca. broadly, we have in 2016, where the second case about the obamacare birth-control benefits. this is the requirement that insurers provide contraception. a 2014 the hobby lobby case would to court. the justice said that businesses do not have to provide birth-control if ever religious objection. now, part two is religious
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employers, such as cap universities, charities, things like that. they are objecting as well. they will the same exception. thes interesting, because hobby lobby of the world had no accommodation. they just had to do it. the religious institutions do have an accommodation. the white house said they met the religious objection. as well as a requirement that contraception be provided and health-care plans. so, the religious institutions do not have to provide it directly. what the justices have to decide is if the religious institutions first amendment right and religious freedom right knee protected. situation inhave a which religious universities have to provide contraception. hobby lobby's will not. that is interesting. or, justices could say that none
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of the institutions have to provide birth-control, if they do not want to. we will probably hear that case in march. we'll probably hear them talk about texas, that is on whether texas can institute restrictions on abortion access. that is going to be a big story in 2016. host: linda is in florida. hello. caller: hello. many of the thoughts and ideas i have had about this already been met. i hope it is not repetitive. my husband and i were on the afford care act last year. our deductible was $6,500 per person. i really struggled with taking a government subsidy. we're not going to take it this year. we will pay the penalty. , it iseither affordable intrusive, i'm so disappointed
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in it. we're going to take our chances on not having insurance. understand when people say they do not have health care. , obviously, wed qualified for subsidy. we're not rich people. but, i do have access to health care. most people do. burden is not greater than the it will be to pay premium. we always carried our own insurance. my highest premium was $500 a month. that is what i have to pay minimum with a subsidy. they have to do something to address this. host: kimberly. guest: this is one of the biggest complaints i'm hearing from users ofd the affordable care act.
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as she mentioned, struggling with accepting subsidies. i wrote a story in which i interviewed people who said i will not participate in this because i do not want to accept a government handout. even when you have these plans, often you are not getting everything you need. so, evaluating different plans is another option. every person can choose what is best for their situation and further help. it is difficult to anticipate what needs you will have. having insurance does help protect people from those kinds of risks. debby is in arkansas. hello. caller: i was on the silver plan. i just qualified for the subsidy. so, there are one of my one third of my income. out of the co-pay was $20 for generic. 15% for the00 plus non-generic.
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i do not make that much. i told him i cannot afford it. they said i'm sorry, get on medicaid. it is still too much to get on state medicaid. i am totally without insurance until i turn 65. i've called everybody. there is nobody who will help with a premium i can afford. host: wow. guest: she is getting at a gap we talked about in coverage. she is in a really unfortunate spot where she almost qualifies for medicaid. she does not. i think that if a backer of the aca were here, she would say that these frustrations are legitimate. ideas, onerepublican idea that democrats are from republicans was personal responsibility. so, if somebody was uninsured goes to the hospital, is in a
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terrible car accident and has thousands of dollars of bills, those costs are being paid by every of the consumer. to give everybody insurance coverage, but reduce the cost and total, that does not do much for somebody who like the caller said, almost qualifies for medicaid, and they're asking for a third of for income for insurance. that is a problem that democrats have to face. they have the good part of the law and expanding coverage. they have the negative part where this is a real story. i do not know how they will marry those two issues. in north carolina. please go ahead with your question or comment. caller: thank you for taking my call. i wanted to mention a plug for the affordable care plan. for 20 years i worked in
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corporate america. i always had my insurance through my employer. through the last recession i lost my job. being in my 50's, it is hard to get the high-paying job that i had before. i had to sign up for the affordable care act. i had pre-existing conditions. nobody would sell me insurance. before the affordable care act. i cannot have gotten it. shortly after i got the insurance i was diagnosed with a brain tumor. i also had to have a hysterectomy. i also had other health problems that required hospitalization. all of this was stuff i did not count on. after i wasplace able to get the affordable care act. available, what
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i want to say to these people who say they do not want the subsidy because they're too proud or they think it is irresponsible are whatever, what is irresponsible is not taking on insurance. have?which plan do you how much do you pay? what is your subsidy? caller: i would have to give you just the ballpark. i have the silver plan. was $800, my subsidy per year. that might be wrong. somewhere in that neighborhood. by the way, the subsidy comes in the form of a tax credit. that is what i do not understand. cuts, thes like tax subsidy is a big tax cut for everybody. it comes in the form of a tax credit. me and my husband a $130 per month.
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it is better coverage than i have had through all the years i was employed. coverage,ot had this we would have lost everything. most likely what would have happened is that i would not have gotten the mri. the doctors would not have done it. it found my brain tumor. i would still be living with a brain tumor and having the impact of that. it could cost me my life. host: thank you. kimberly, u.s. news & world report. guest: we're hearing a lot of the stories also. the variation of experience in this law is so different from person to person. state to state. every situation is different. so, there are cases in which people are very happy. approval of the law in general has stayed the same. host: nearly 50%. guest: yes. nearly 50% disapproval. that is according to the gallup
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poll. that has not really changed as provisions have rolled out. that is were concerns from the administration should come. you have these provisions yet people's variability has not changed much. oft: this was susan and four premier, the health care-based company. 3600 member hospital. this is some of her writing about this. it is that the aca has not broken the bank. employers have not dropped coverage for their workers. the aca is alive and well. it is continuously being implemented. arguedgressional office that it will cost $142 billion over the next 10 years. 11% less than the agency had predicted. how do they figure that cost?
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guest: that comes out of everything. where looking at how much is the nation spending? how much is the nation taking and from these tax cuts. i just wanted to add to the caller that one of the things 2009-2010hoped for in when the result is animosity, democrats were hoping for callers like this one, she got insurance, and then the doctor found her brain cancer. she had a hysterectomy and had coverage. democrats are banking on these good stories. they want multiple examples of this. found thisters have as well. good stories are out there. it has not changed public opinion. polls are sitting where they were. , it is baffling on one hand.
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on the other hand, people separate these good stories. with good consumer reports. they have the politics of it. there are some people who do not like obamacare, but like their plant. there is seen to be a divide on a consumer versus political that people have not overcome. i do not know that they will. host: from 2008-2013 according to this article, the growth in this nation's $3 trillion health bill hovered below 5% in 2014. cost climbed by 5.3%. they will likely rise by 5.8% annually for the rest of the decade due to the aging population. costly diseases. the infrastructure costs of the health care transformation. what are those infrastructure cost?
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guest: it has to do with changes in health care and new portions of the lobby developing. going back to when you are talking about how the cost of the aca was less than originally anticipated, it is a little more complicated than that, because it is less than anticipated because not all states expanded medicaid. when they had anticipated the law, that is something they thought would occur. it did not. fewer people signed up for marketplace plans then had anticipated. that could be good news. it could be that people are getting jobs and getting it through their employer. or they are choosing not to enroll in insurance. or, they are on enrolling in some cases. michael in alabama. go ahead with your question or comment on the formal care act and health care in america.
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well, i'm from alabama. have blue cross blue shield. i have to go to a new doctor every month. it pays for my psychiatric doctor. i think if you years ago, it has been a while back. this drug caldwell putrid. , they dopposed to be not have a generic for it. was about blue shield 25 or $30. it paid for that. of any otherw health provider in alabama. host: ok. we got your question. what awant to address lot of colors are talking about which is these prescription drug costs. what are we start with choices in alabama. some of the prescription drug costs. guest: i do not know the list of
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choices in alabama. they are available on they vary state to state. the number of insurers go who chooses for that state. mississippi they only had one insurer in most counties. that is not much choicer competition. that changed. i think that most of the company has many choices. callers can see the number of options in alabama. if other insurers wanted to go there -- i'm sorry i'm forgetting the second half. host: let's see if kimberly wants to address prescription drug costs. guest: one of the proposals been made about these drug prices is to post what they each cost. drugsw that prescription have been a major driver of the
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growth in health care spending in 2014. at u.s. news we have an interactive we have developed that looks at costs over time. it is called the health care index. it will show how different factors of health care impact the economy. some consensuss that something has to be done about this drug prices. the center for medicare and medicaid on the last week posted on this dashboard of what they spent on medicare. on the top 80 drugs. that is one way to get consumers to say hold on, this is what we are paying? host: i think 180 $9 billion was spent last year. on drug costs. they said it could reach 400 billion. is 373 billion when you look at what everybody puts into it. host: in prescription drugs?
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$273 billion. that includes out-of-pocket costs, co-pays. everything. that includes what you get of hospital and which administrative yourself. host: this drug spending cuts for 2014. allen is in alabama. good morning. how are you? i have two simple questions. one is, in your opinion, what you think is affordable about the affordable health care act? second, do you think it is fair? host: what do you think? i -- no, it is unaffordable. i cannot afford it. i work a full-time job.
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it is not affordable. it makes no sense. host: have you investigated it and done the exchange research? caller: yes sir. host: does your job offer insurance? caller: no. they cannot afford it due to the way the law is written. over 50, then it will be unaffordable for everybody. as far as being fair, i think it is highly unfair. if you do not sign up for to be penalized. why are you penalizing me for something i cannot afford? that is not right. host: if he does not sign up, what happens to him? he works at a place with less than 50 people. he says he cannot afford it. will he have to pay penalty? guest: yes. will belty in 2016
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$695. per individual. host: how will people know that he does not have insurance? honest taxesl be for next year. he will have to answer question about having insurance. if he says no, he will oh $695. there are exceptions. if you do not make enough money, you get out of it. if you have a hardship in the year, you could get out of it. in 2014 2015 they were pretty liberal exceptions. to can officially say i try sign up and i had a hard time coming you could get out of it. and years to come and be harder and harder to get the exception. it is kind of considered a grace time. if you have a legitimate reason, or if you are covered for 10 months of the year, you will not have to pay the penalty.
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is a substantial amount of money. the $695 is a lot of money. for a child it is half of that. is 695 dollars or 2% of your income. whichever is higher. for some people, that 2% could be a lot of money. host: we go to west in chattanooga. good morning. caller: good morning. thank you for taking my call. i like to say that i'm a 66-year-old proud vietnam veteran. i also work at the v.a. until i had heart issues. i am on disability. anyway, to make a long story short, the differences in medication, people being able to contact the government. the v.a. can get one price, it medicaid gets one price. for as all designed
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capitalistic society. giving the free market a chance. i would just like to say, if we take the politics out of it all, the latest from north carolina, the man from florida, both of them said the truth. plain and simple. i am a southerner here in tennessee. have this red attitude and blue attitude. it shows. it is sad. it is said because it is called affordable care. it will work. take the politics out. host: we got his point. do you have any response? ,uest: looking at drug prices one of the biggest arguments that pharmaceutical companies make, when you look at some of these prices, some of which reach $100,000 per year. they sate is a listed price.
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many other institutions negotiate different prices. we do not always know they are, but they might not be listed. that has given them some room to price things differently. when they price drugs, they take that into account. that has been an issue goaded to drug prices. whether they will be more transparent moving forward, or whether more choice will hit the market. host: george in florida. go ahead. caller: good morning. from in fact, i live in austria. weigh in onwould this conversation. i spent most of my adult life in europe. i have national healthcare. in austria.
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i listen to these discussions and descriptions of what is going on here in the states. i'm kind of horrified. i can give you a few examples. my wife, who taught for 15 years at a big university of in boston , had insurance through them. she also has national healthcare. she is retired now. -- she had cancer when she was working. sure it through all the things one does. you mentioned your horrified listening to the bait. why's that. -- that? caller: the complications. the politicization's. the hoops that people have to go healthy.o get and stay
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the prices they have to pay for medication. can you take your austrian national insurance card to france, to england, to anywhere? caller: yes. , over the years i spent quite a bit of time in france and paris. doctors when iee was in france and in paris. and in germany. in cyprus. host: does your card work here? caller: no. it does not. my wife is retired, i'm a professor, i have more free time than i used to. our kids are here. so come to the states more often. no, we take travel insurance. if something serious were to
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happen, our insurance would pay to get back to austria. need to bes hospitalized, they would pay for that. they do not have the agreements with the u.s., i do not think any european countries do. host: 20 think there's a difference? partly i think it is politics. there is a lot of misinformation and lies about national healthcare. how it works. it is very simple. we heard this morning, i have not heard this whole conversation. of not wanting to take government handouts. said, it is a tax break. i think it is basically
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insurance companies having a stranglehold on health care. host: thank you. they differ your perspective. we go to jennifer. guest: it is interesting. forve heard similar things people. they like the government run health care system. it is earned popular. of course, you hear criticisms every once in a while. i think that overall, their popular. and the united states we have canadian health care or european health care is negative. we hear about waiting lists and we hear about whether or not you get care. , in the united states, after world war ii there is a development of your job providing your health insurance. that's sprung up, and now the vast majority of people get their insurance from their job. employers like that they can provide it as a benefit. it is enticing to employees. said when he even
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was campaigning that perhaps, there is a better way to do this. you cannot disrupt a huge country where over 50% of people get their insurance from their job irish shaping system. they had to build on the private insurance program. where, companies provide insurance. your employer will offer insurance. and, that made up more complicated than just saying that the government will provide your insurance. host: web if human is left. been in pennsylvania. good morning. go ahead. -- ben from pennsylvania. -- we only have a few minutes left. the affordable care act. i'm 42 years old. i've been a democrat my whole life. i will not be a democrat in this next election. before the affordable care act, i had insurance.
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i did not have to pay this huge subsidy. now, i have a plan that costs five from $75 per month. bull -- $13,000 but dr. the dr. bull -- deductible. is $140 peridy month. at the end of the year, when i get my taxes done, if i make more money, they will make me pay it back. to say that you will fined six under $95 if you don't have health care, it is like saying ok, if you do have health care insurance, and you do make more money, you will pay more than that. me, this got word was because of lobbying, the health care side, and the government saying
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look at this, health-care companies when. this constant money going to them. it government winds because is less money they have to get back. the american consumer loses. host: thank you. kimberly? guest: this is a story we have heard a lot. about deductibles, how can afford to pay them you can i would encourage viewers to really complain to the department of health and human services. complaint to state regulators. say this is how things are going for me. there are people on the other hand working to try to improve the law through the process and clarify some of the guidelines. a lot of consumers do not file these complaints. ,hey might not get money back but, it is important, the system's arm place to help people. so, it is important for people to let their government, state
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and federal government know what is going on with insurance. host: rudy in california. go ahead. yes, i was on the affordable care act and 2012. that was after i got unemployed. i page $208 per month. was $485, if it was not for the affordable care act, i would have gone without insurance. so, this is a plug for the affordable care act. plus, i do not hear too many republicans taking their kids off insurance. so, in my opinion, the affordable care act works. maybe people should come to california and they would not have problems. host: thank you for calling. in fact, several million -- i'm looking for the figure -- several million people have
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stayed on their parents insurance up to 26. the figure not know off hand. i would say it is the most popular provision. it has a lot of bipartisan support. whenever republicans talk about a replacement plan. they say they would include this. so, i assume it will stay in existence forever. one of theutcome of most popular pieces is that insurance companies cannot deny coverage to pre-existing. host: we have about one minute left. ashley, florida. caller: good morning. i have a few questions. number one, are either of you licensed to sell or speak but health insurance? do either one of you have an aca policy? host: why are you asking these questions? that i liveoint is
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in florida, i'm 59 years old, i am uninsured. i have sold health insurance for 25 years. neither one of these ladies on their program speaking about insurance -- they are not even licensed. you called in on the uninsured line. yet you sell health insurance? caller: no, i am unemployed. i saw my license. i do not have insurance. host: thank you, that was ashley in florida. do either of you have an aca plan? guest: no. i go through my employer. it is a large company and it has always provided insurance. throughave insurance your job, you're not allowed to go to the marketplace. quality insurance
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coverage, you're not allowed to go to the marketplace. guest: even though we have private plans through employers, we are still impacted by some of the rolex of the affordable care act. we received a lot of preventative benefits, and care that anybody else would. , give us5, health-care your 32nd summary. kimberly. guest: we started to see a lot more consensus about what needs to change. there has managed to be role that in certain taxes. were uphelds through the supreme court. that means no matter where people apply for aca, the matter what state they are rain. they are eligible to receive a tax subsidy. host: what you think will happen 2016? guest: it will continue to be a battle. both sides are lobbying. not just push back, they want
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things removed. we will need a way to pay for this tax insurance subsidy. we will need a way to pay for people on the system. they're going to have to find a way to fix these issues. 2015i will remember because the aca survived. it faced a challenge in the court, and it was the law pretty much the same with the cadillac tax. i will remember this year as the year where bipartisan changes became possible. medical device tax, which we talked about. we saw a couple of tiny tweaks that affect expatriates outside the countries. 2016, the attention will shift from capitol hill
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witches and outside of health care story in election-year, let's focus more attention on what the political candidates are talking about for the aca, what we have seen republicans talk about if there is a serious replacement plan. whoever the republican front-runner ends up being, that he or she puts out a replacement plan, what hillary clinton has to say, and the courts. they will be a focus of attention. thank you both for the last two hours and thanks for >> here on c-span tonight we look back on some of the notable people who died this year. among them, former senator fred thompson. his comments from 2007 on principles of leadership. here is a brief look.
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mr. thompson: the main thing, i think, that we need to think about going forward, what are the principles we are going to operate under? 20-point plan is great. a-ha, i can beat him, i've got a 30-point plan. that's great. but what are the underlying principles? when the plans go asunder and you can't get at an agreement on something like that. i think the united states and we as citizens ought to remember our first principles from what i call our first principles. i don't think the declaration of independence on the constitution of the united states are outmoded documents. the declaration says -- [applause] the declaration tells us our rights come from god, not from government. [applause] the constitution has a framework
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that is set up not as some kind a result of bureaucratic haggling, but something that is designed to protect freedom. >> the comments of late senator fred thompson, part of c-span's oriam" tonight, a look at the notable people who died during 2015. it begins at 8:00 eastern. three days of future programming this new year's weekend on c-span. friday night at 8:00 eastern, law enforcement officials, activists, and journalists examine the prison system and its impact on minority communities. >> of the first and, i think, prisonsreason we have is to punish people for antisocial behavior and to remove that threat from society. prisons are to keep us safe. whether they are going to rehabilitate the prisoner or deter future crime, i think those are really secondary
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concerns. freight if it happens, but the primary purpose of the prison system is for people who are not in destitute society safe from the effects --to keep society safe from the effects posed by those folks. >> elected officials and law enforcement from areas experiencing racial tension from police. >> they get the job and do their job saying "i am protecting the public." their idea of the public is those who gave them their marching orders, and that is us. need to look at all of that could we talk about transparency. we need to look at those rules that they start using to engage themselves with our community. >> and sunday evening at 6:30, a discussion on media coverage of muslims and how american muslims can join the national conversations. at 9:00, young people from across the united kingdom gather
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in the house of commons to discuss issues important to them. >> this issue is so much more than buses, trains, and expense. -- expanse. as a child, i could not wait to experience a bus or train journey. up, we, when we grow have seen trains lose their smiley faces and we know the while weand honking can afford the bus to school tomorrow. >> for the schedule, go to >> today, the governor of puerto rico said the territory would be unable to pay creditors the $1 billion it owes on january 4. this is the second default in the island's history after failing to make promised payments in august. the governor recently spoke rico'suerto
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debt crisis at the national press club in washington. this is one hour. >> welcome to the national press club. bloomberg'sr for word," and i'm the president of the national press club. ricopeaker is the puerto governor, who will discuss the financial state of his country and a new development including some new developers within the past 24 hours. but first, i want to introduce our distinguished head table. this table includes club members and guests of the speaker, and they will stand when their name is announced. right, aaudience's reporter with "audiovideo news." a contributor for salem radio network and a blogger with huffington post.
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and she has covered the white house for almost 15 years. president of creative alliance communications and board member for the national association of hispanic journalists. a producer and anchor at univision washington. secretary of justice for puerto .ico breaking news editor at "usa today," former national press club president, and vice chair of the club's speakers committee. skipping over our speaker for a newst, a bloomberg economic policy reporter, and she organized today's lunch for the speakers committee. thank you.
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associate producer at fox news channel. america advisor newsletters, which is part of inter-american dialogue. gallup. editor at [applause] i also want to welcome our c-span and public radio audiences. you can follow the action on #npclive.sing that is #npclive on twitter. puerto rico, to put it plainly, .sn't the financial trouble the population is the size of of $70a, yet its debt billion is greater than any u.s.
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state except for california and new york. poorer than the poorest u.s. state. its economy has been in recession for about a decade. agenciestory and its have $957 million in debt payments that are due on january 1. there are questions over whether firefighters and schoolteachers will be paid. found it easy to borrow because the bonds it issues are exempt from local, state, and federal taxes all over the u.s. however, the shunting economy and tax -- shrinking economy and taxpayers escaping to the mainland in hope for a better future have made it more difficult to pay off the debt. governor padilla, leader of the
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island's popular democratic party, wants congress to allow the u.s. territory to declare bankruptcy. padilla, who was elected governor in 2012, told a senate committee earlier this month, "let us be clear, we have no cash left." padilla, who is not seeking reelection, said allowing puerto rico to declare bankruptcy would give the territory the ability to restructure the debt in a court-supervised process. the obama administration supports the bankruptcy request. congress held five hearings on the issue this year and introduce at least half a dozen bills that would help puerto rico, but none of these bills has passed in either chamber. but just last night,
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congressional leaders announced that the year-end spending bill expected to win approval this week includes aid for puerto rico. according to lawmakers, this bill provides almost $900 rican doctorserto and hospitals over the next decade. it does this by increasing payments for the hospital stays of medicare patients in puerto rico. now, to give us the very latest on what this aid will mean for puerto rico's financial plight and whether it will be sufficient to help puerto rico get through the winter, we now turn to the governor himself. ladies and gentlemen, please join me in giving a warm national press club welcome to governor alejandra garcia padilla. [applause]
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gov. padilla: thank you. thank you so much. hughes, for that kind introduction and for inviting me to join you today. constituents are strong, hard-working, proud american citizens. we have always answered distress calls when the rest of the country has sent them. hundreds of thousands of puerto --ans have briefly answered bravely answered the highest calling, serving and giving their lives in disproportionate conflictn every armed
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since the great war. millions of puerto ricans, men and women, continue to proudly, selflessly bear our common good and contribute to their communities, both here, the mainland, the islands, and overseas. and pride aresm felt in every industry in every state. in recent years, puerto rico's economic issues have been in the news and many of you have highlighted the problem my people face, and we have made it very clear that we need help. the plan -- i planned this trip with optimism, truly expecting that by today -- we have all the tools we need.
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why was i optimistic? i will give you four very simple reasons. one, because of the severity of the crisis we face in puerto rico. the commonwealth has lost access to the great market. we have been able to provide essential services only because we are withholding tax reforms and vendor payments and because we have sold assets from our workers' compensation insurance funds and our pension funds. people, sometimes our best trained people are leaving the island en masse mostly
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[indiscernible] this will only increase as our economy continues to deteriorate. two, because puerto rico's debt is inevitable and the financial market knows that. three, because without the strictest mechanism, default will be chaotic, leading to complex and very costly litigation. and four, because of the legislative framework will avoid chaos without costing one penny to the united states taxpayers. but today, today i am extremely disappointed. why? because yesterday, yesterday
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congress missedd an opportunity to do the right thing. hedge funds proved more persuasive over congress the well-being of 3.5 million american citizens living in puerto rico. i want to repeat that. hedge funds proved more persuasive over congress than the well-being of 3.5 million american citizens living in puerto rico. the people of puerto rico is in the midst of a humanitarian crisis. we are losing our workers, our consumers, our tax base that's critical to our equality. since i took office in january,
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2013, my administration has taken bold emergency measures to address this crisis. i reduced 24% of our expenditures. 24% of our expenditures. we approved additional revenue measures, including increasing the gas tax and water rates. we had a collective bargaining agreement. public transportation routes have been cut. our largest pension fund was reformed and a new tax on enterprise was put in place. puerto rico's currently transitioning from the sales tax to a value-added tax with 11.5% rate.
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[indiscernible] 15,000 position from government [indiscernible] entering essential services to puerto rican families. in june, i laid out a comprehensive report on our crisis and a realistic picture of our future. the reality is that we cannot pay our debt. we cannot pay our debt. earlier this month i announced that the commonwealth will meet our -- we'll default to try to pay bonds backed by the full faith and credit of the commonwealth. we are, as we say in -- as we say in spanish schools
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[speaking spanish] or as you say, robbing peter to pay paul. there's something very, very important to understand. it's important to remember this crisis didn't start in san juan. this crisis started here in washington. this crisis began here in washington, in this town. in 1996, congress terminated section 936 of the united states internal revenue code that attracted business to the commonwealth. its termination crippled our economy.
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it led directly to our recession. furthermore, congress has chronically underfunded puerto rico's medicare and medicaid programs. we, puerto ricans, we pay the same payroll taxes as everyone else in the united states to ensure that our seniors and most vulnerable citizens are protected. we have been singled out. and now we are out in the cold. and yesterday congress blocked puerto rico from getting the legal protection that will help us weather the storm. let's make one thing crystal clear. we are not asking for a bailout. puerto rico is not asking --
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puerto rico has not asked for a bailout. we are asking for fairness. fairness has been denied. this past monday, i announced that i was not seeking re-election. i can say to my people, i felt i had to commit all my energy to solving the fiscal and economic crisis that i inherited. i will have liked to return to puerto rico with the tools that will enable us to move forward with a fair and orderly restructuring.
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that which costs nothing congress has denied. i go back to join in the resilience of a great, hardworking people, ready to do everything and secure their dignity and well-being. i have said before and i will say it again, this is not politics. this is simple math. we have no cash to pay, and we will default. that's a fact. it is not a matter of whether we pay or not. it is an issue of how congress decides puerto rico's default will unfold. it will either be an orderly process or chaotic.
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congress will either provide a broad restructured legal prame work that costs nothing or allows further disruption -- framework that costs nothing or allows further disruption to the puerto rican economy and cause more people to flee the island, adding to the more than 10% of our population that over the last decade has migrated. congress has held multiple hearings on puerto rico's crisis. the facts are very well-known. congress has been warned. wall street won this round. i hope that congress will provide us the tools we need.
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in the meantime, in the meantime it seems that for many members of congress we, puerto ricans, are only good to send to the front lines of war once again, puerto ricans are a casualty. but this time the casualty of congress. now i will go back to puerto rico to convince legislators, business leaders and labor leaders to chart our next steps
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. thank you for having me and thank you for your time. [applause] >> thank you so much, governor. i mentioned in the introduction , while congress didn't give you what you came here looking for, they did say that you're going to get $900 million in medicare over the next 10 years. what does this accomplish, how much does this help? governor padilla: imagine a patient goes to the emergency room with a stroke and is treated with a diet, the patient will die. congress is telling us, you had a stroke. you need to eat better.
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thanks but no, thanks. they did nothing. >> so what do you do now with congress? do you continue to lobby? do you continue to work this or what happens next? governor padilla: we will continue. the facts are there. they know the facts. there's no single argument. let me be very clear. the restructuring process will be good for everybody. the absence of that framework will be bad for everybody. not having that framework will just get us into litigation that will be very expensive,
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very complex in different courts everywhere in the united states and puerto rico and maybe overseas because there's no legal structure. without reason, puerto rico was -- puerto rico was took out from the cold in the bankruptcy court in 1984. no one says why. and this will be a real crisis. and every court in the united states, which creditor will have seniority in front of the other? who will determine it? who will collect first? in which court a judge will determine that. no one knows.
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no one knows. they will be fighting each other. they won this round. and puerto rico will never have enough money to put in congress' halls to lobby in favor of fairness that they just did and they are about to do it again. but we will fight back. >> this questioner says, it's clear from the negotiations on the omnibus bill, this bill we're talking about, it's clear from these negotiations that republicans don't want to give puerto rico access to bankruptcy protection. so will you keep asking for that specifically or will you change, do you need to come with a new type of proposal for them? governor padilla: puerto rico and the administration concludes, everybody that is thinking about this, concludes there's only one way to tackle the issue.
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not to kick the can. what they approved is a way of trying to help to kick the can. let's give you $90 million a year for 10 years when you have a $70 billion debt. i'm not asking for a bailout. i'm asking for the tools. and ied to them in the first year -- a couple months ago, it will be more expensive -- and it will be -- and the ball will remain in their court. i was asking for them to send the ball to my court, to give me the tools. it's a puerto rican issue and we need to solve it but we need the tools. i was asking for the tools and i'm asking for the tools. if they do not act, the ball will remain in congress' court.
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today, the ball is in congress' court. >> so could you walk us through what will happen on january 1 when puerto rico face this is $957 million debt payment? are you planning to pay at least some of it or delay the payment? what will you do? governor padilla: puerto rico will default in january or in may. there's no money. i have no printing machine. there's no money. and the constitution guarantees the people of puerto rico to provide essential services, and i have no money to provide essential services and to pay the creditors. they need to understand that. what will we do?
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i'm always doing my best to do both things, but the time will come very soon and will probably be on january 1 -- i'm trying to avoid that, but probably will be january 1 that i will not have money to do both things. and if they make me choose between puerto ricans and creditors i will choose puerto ricans. always. there's no question about it. if i need to choose to pay an essential service to puerto ricans or the creditor, they can -- they can -- they can swear that i will choose puerto ricans. >> so what will happen when you default? governor padilla: i will be sued. there will be -- government may close. essential services may be lost. i will not have money to pay essential services like security, like health care, like -- providing health care.
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and what will happen? what will that provoke? our economy will go to the bottom again and if the economy goes to the bottom again, what will happen, if i have less money to collect i will have less money to provide services and pay creditors. and so on and so on. so every month will be worse for who? for us and for creditors. because then we will get to that spiral that we were trying to avoid. who will put us into that spiral? creditors and congress. and that will be expensive because that will cost. that will cost. what we ask will cost nothing. so we are about to get into a
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humanitarian crisis. just compare it to an atmospheric disaster in puerto rico. just compare it to that. >> in your talk you mentioned a 24% budget cut that you had made. what about additional budget cuts? do you anticipate more budget cuts? governor padilla: more than 80% of our budget is to pay police people, firefighters, nurses and the medical center and teachers. 80%. so we get to the bone. we get to the bone. already. there's nowhere else to cut. i introduced 75% -- reduced 75% contracts in government agencies.
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75%. for each $4 we spend in contracting agencies, we are spending $1. but they will need to fire people. if i do that, if i fire people, i will damage the economy so i will get to the debt spiral and, again, i will be choosing them against puerto ricans and i will not do that. >> you have said before that if congress doesn't act, you will turn to the white house for help. what exactly will you ask the white house to do, and can the white house take any unilateral action outside of congress to help you? governor padilla: that we find out there's no action without congressional action that will solve the problem.
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so if they're waiting for jack lew or for the president to solve the problem, we have to find a way where without congressional action will be different than kicking the can. there are ways, we think, and we have been working with our -- with treasury. if we kick the can the problem will get worse. if we kick the can, then it will be worse in a couple of years. the debt will be higher. it will be just worse for everybody. creditors and for puerto ricans. it's as simple as that.
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the facts are there. for example, i heard someone saying that we have enough money if we cut or go even further to pay the debt. in the bankruptcy process, the first thing that a debtor needs to prove to the court is they have no money to pay. so they are safe. i just hope that congresspeople can remember the names and the faces of those that lobby there telling them that puerto rico has money to pay and they will not be such a humanitarian crisis. i just hope that the congress men and congresswoman and the senators remember their names and faces because the hedge funds and the budget funds and the creditors will need to change lobbyists.
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if they can remember their faces and their names. >> this questioner says your remarks contained no reference to the long history of puerto proflagate spending or selling junk bond to get capital. didn't puerto rico see this calamity years ago and what responsibility does puerto rico hold for this crisis? governor padilla: yes, a lot. the crisis began here. what happened? 1986 -- section 936 allowed a competitive advantage to puerto rico to bring american companies to puerto rico. those companies went to singapore or to vietnam or to china or to japan. they went to puerto rico.
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why congress approved section 936? because puerto rico -- because of the oil crisis. with section 936, congress helped puerto rico to work. 20 years later, in 1996, they repealed section 936. with the 10-year phaseout period that ends in 2006. what happened in 2006? we went into recession again, because we lost that tool. where does companies go? back to the states? the answer is no. they went to singapore. they went to ireland. so congress sent those jobs, american jobs to singapore, to ireland, to vietnam, to new zealand.
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what government did in puerto rico to [indiscernible] lost wealth and government -- governors from both parties, both parties began to feel the gap with loans. maybe waiting for the economy to revamp. it didn't happen. and then they began to take loans to fill the gap and to pay loans. between 2006 and 2012, puerto rico doubled the debt that was accumulated from 1981 to 2005. i'm sorry. 1941 to 2005. so what we accumulated from 1941 to 2005 was doubled between 2006 and 2012 because
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two governors tried to fill the gap and to pay loans with loans . that was wrong. and they knew it. but creditors knew it too. creditors knew it too. they knew the numbers. they were there. they knew. so i think that there's a shared responsibility in congress, the government of puerto rico and with creditors. >> how about you yourself? did you do anything as governor to make the situation worse and knowing now what you know, do you wish you would have done anything differently? governor padilla: a lot of things, yes. a lot of things.
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first, i was sworn in and i decided -- catya asked me in the elevator if i -- when i was sworn in if i thought -- it will be that difficult and the answer is no. the governor of puerto rico, my predecessor used to say the deficit was $333 million. $333 million. so i won. and during the transition process, we find out the deficit was $2,000 and $200 million. $2.2 billion. i said, recount. but in puerto rico the laws don't allow the winner for a recount. [laughter]
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so i decided not to convey the message to puerto ricans to drive a positive message that we will -- this is the real thing. it's $2.2 billion. you know what, we will succeed. let's fight together and we will make it happen. let's forget the past. let's look into the future. so people claimed and i think they're right that i need to communicate the real problem and to challenge the creditors and to challenge congress
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earlier and i think that's my -- the main thing i regret. >> have you approached any of the republican or democratic presidential contenders to ask them to make the crisis in puerto rico a campaign issue, especially since the latino vote is crucial to both parties in next year's election? governor padilla: yes. i have to say i don't want to miss anyone. secretary clinton addressed the issue in favor of puerto rico. governor martin o'malley addressed the issue in puerto rico. senator bernie sander addressed the issue in puerto rico. senator marco rubio addressed the issue in favor of creditors. i don't know of any other. jeb bush addressed the issue of i think for the restructuring process.


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